Where’s the bottom?
That’s the question many in the trucking industry are asking as the freight recession continues for yet another month. Freight volumes are still down and it is looking like the annual holiday shipping rush is turning into the holiday trickle.
According to DAT Freight & Analytics (dat.com), spot dry van linehaul rates (minus fuel) in October of $1.67 per mile were up only 2.5% from October 2024 rates. Refrigerated spot linehaul rates were a little better, rising 3.5%, while flatbed rose 3.6%.
Capacity is shrinking.
U.S. sales of new Class 8 trucks in October ran nearly 30% behind the same month in 2024. For the year-to-date, sales are running 11.5% behind the 2024 pace and the gap grows larger every month. According to a Quinn Donoghue story in Equipment Finance News (equipmentfinancenews.com), eleven more carriers filed for Chapter 11 bankruptcy in October, following 10 in September. FMCSA efforts to remove drivers that aren’t legally authorized to be in the U.S or can’t meet English Language Proficiency standards are reducing driver numbers.
With U.S. inflation running at an annualized rate of about 3%, freight rates aren’t keeping up with trucking cost increases. The national average price for a gallon of diesel fuel reached $3.87 the week before Thanksgiving, the highest it’s been since May and twenty-five cents per gallon higher than just a month earlier. Diesel was $3.49 per gallon or thirty-eight cents cheaper a year ago, a one-year increase of 11%.
Is there good news?
The “good” news is that capacity is shrinking. U.S. sales of new Class 8 trucks in October ran nearly 30% behind the same month in 2024. For the year-to-date, sales are running 11.5% behind the 2024 pace and the gap grows larger every month.
The news is only “good,” however, if you’re not one of the bankrupt carriers or unemployed drivers. Those that can hang on until rates get better are hoping 2026 will be better. For that to happen, capacity needs to continue shrinking, but rates would rise faster if manufacturing production increased. In other words, while the supply side of the capacity equation is shrinking, it’d be nice if the demand side grew some, too.
The American Trucking Associations (ATA) (trucking.org) reported that its Truck Tonnage Index fell 2.1% in October after a 0.8% decline in September.
“October’s weakness shows the freight market remains very difficult, dropping the most of any single month since January 2024,” said ATA Chief Economist Bob Costello. “As a result, the level of freight was the lowest since January 2025. Compared with a year earlier, tonnage experienced its largest decline in 2025.”
The Cass Freight Index for Shipments fared no better, dropping by 7.8% from October 2024 levels. (cassinfo.com). Although the Cass Index incorporates multiple modes of transportation including rail, ship, pipeline and air, about 75% of the data comes from trucking and all of it is representative of the economy.
Tim Denoyer, vice-president and senior analyst at ACT Research (actresearch.com) who writes the Cass report wrote, “Fleets continue to struggle financially, and with losses continuing to pile up, investments are being sharply curtailed. The commercial vehicle outlook from ACT Research foresees considerable declines in equipment demand in 2026, with rates insufficient to offset cost inflation. The public TL (truckload) fleets margins are at generational lows and unable to find traction in 2025.”
Denoyer points out that an upcoming Supreme Court decision on the constitutionality of Trump-imposed tariffs could mitigate cost increases caused by tariffs.
Volumes falling
At DAT, truckload volumes continued falling. The company reported its dry van Truckload Volume Index fell by 3% from September and is down 11% from October 2024. Refrigerated fared only slightly better, down 2% for the month and 7% year over year. Flatbed declined 4% month to month and 3% from October 2024 levels.
“Freight volumes in the third quarter and October reflect what we’re seeing in the broader goods economy, with shippers drawing on inventory built up earlier in the year to reduce their exposure to tariffs and weak consumer demand,” said Ken Adamo, DAT Chief of Analytics. “As a result, the traditional peak holiday shipping season looks virtually nonexistent this year.”
Diesel fuel cost, while higher, can be at least partially mitigated by fuel surcharges. Truckers should be encouraged, however, by the November Short-Term Energy Outlook published by the U.S. Energy Information Administration (EIA).
It calls for the barrel price of Brent crude oil to drop from its 2025 average of $69 down to $55 in 2026, due to increased global inventories. The agency expects diesel prices to fall to $3.50 per gallon.
Those expectations can change due to extreme weather events, regional conflicts or for other reasons, but for now fuel costs are predicted to be lower. One scenario mentioned in the EIA report is sanctions on Russian oil production in response to their involvement in Ukraine. A greater than expected decline in Russian oil could push global prices upward.
Another factor that can influence trucking volumes in 2026 is the expected further reduction in the Federal Reserve’s federal funds interest rate. The FED was expected to cut the rate for the third consecutive time at its December meeting, but stronger than expected jobs numbers in September as well as the delay in government economic reports caused by the recent shutdown may prompt them to leave interest rates as-is until next year. Lower interest rates could stimulate the sluggish home building segment of the economy as well as boosting sales of autos, computers and other durable goods, helping to boost freight volumes for trucking.
As the trucking industry limps into 2026, carriers large and small are hoping to hang on until better times arrive. Shrinking capacity points to a better trucking environment, but it may be too far away for some.
Cliff Abbott is an experienced commercial vehicle driver and owner-operator who still holds a CDL in his home state of Alabama. In nearly 40 years in trucking, he’s been an instructor and trainer and has managed safety and recruiting operations for several carriers. Having never lost his love of the road, Cliff has written a book and hundreds of songs and has been writing for The Trucker for more than a decade.
